Colombia

Colombia’s most punctual airline for the fourth consecutive year

Colombia is Latin America’s third largest air traffic market, with a rate of 0.7 trips per capita per year; an indicator that although exceeds the average of the countries of the region where the company operates, is still quite distant from the rates experienced in developed countries such as United States and England, with two or more trips by person per year.

The year 2016 posed significant challenges overall to the airline industry in Colombia, as a consequence of the increased value of the US dollar and of the economic slowdown in the country, compounded by an increasing competition that has been characterizing the market (at year’s end began to operate Wingo, a new low-cost airline owned by Copa Airlines). Even though rates have fallen 13%, the number of passengers carried on domestic flights grew 4.4 percent, evidencing a slowdown in the dynamism shown by domestic operations during the last decade, with average expansion rates of 11% per year.

In this scenario, LATAM Airlines Colombia continued to strengthen its value proposal focused on the client and, at the same time, on its own competitiveness and efficiency by reducing operating costs and passing them on to lower rates and thus maintaining sustainable levels of profitability over time.

With five years of operation in the country, the Company remained during this year as the domestic market’s second airline, with 4.8 million passengers transported in domestic flights, 4.4% more than in 2015 and achieving a market share of 21.1%, measured in RPK, growing 0.7 percentage points in relation to the previous year.

In domestic routes, the Company competes with the Colombian nation’s flag carrier, Avianca, the market leader with a market share of 58.1%, besides Viva Colombia (13.8%); Satena (3.0%); Easy Fly; and, Copa/Wingo with less than 2% each, among the top ones.

LATAM Airlines Colombia serves 14 destinations in the local market, offering a wide connectivity from Bogotá and Medellin. In 2016, its consolidated air passenger traffic (RPK) grew 8.9% and its capacity increased by 6.8% (ASK); and, consequently its occupation factor stood at 80.3%, with an advance of 1.5 percentage points in relation to 2015. It should be highlighted that starting on July the company suspended the operation of the Cali-Medellin-Cali route that operated with two daily frequencies; however the connectivity between both cities was maintained without modifications from the city of Bogota. The decision to suspend this route was adopted considering the low level of passenger occupancy of these flights.

Beginning in March 2017, the company will begin operating two new routes to the interior of the country, such as Cartagena-San Andres and Medellin-Santa Marta, initially with four weekly flights in each case. In this manner, the LATAM Group seeks to strengthen the network of connections in Colombia and continue boosting demand for travelers to the North of the country, with flights connecting directly with cities other than Bogota, taking a new step toward decentralizing its domestic operations.

To serve its domestic flights, in 2016 the Company used a fleet composed by 17 Airbus aircraft of the A320 family, two more than in the previous year; eight of which correspond to Airbus A320 and nine to Airbus A319; a model that LATAM Airlines Colombia began to operate in October of 2016. All of these aircraft are equipped with a modern on-board wireless entertainment system that operates through a mobile application.

In terms of service, one of the landmarks of the period is the consolidation of LATAM Airlines Colombia -for the fourth consecutive year- as the most punctual airline in the country on domestic flights, with 97.4% punctuality according to the latest airline compliance report prepared by Colombia’s civil aviation authority covering the first half of 2016. This recognition is due to the Company’s continuous effort toward promoting a culture of punctuality within the organization, by investing in training, technology and a modern fleet. For LATAM Airlines Colombia, punctuality is indeed an attribute that differentiates it before its clients.

On the other hand, the District’s Environmental Secretariat (Secretaría Distrital de Medio Ambiente) distinguished LATAM Airlines Colombia as a leader in environmental management and performance in Bogotá (District’s Program of Environmental Excellence – PREAD, in its Spanish acronym). Following a rigorous evaluation by over 100 companies, the Company joined the “Environmental Excellence, generating sustainable development” level, comprised of those organizations that, in addition to complying with environmental regulations, have an environmental management system in place based on continuous improvement permitting compliance with its environmental performance indicators.

Along this line, and for the third consecutive year, LATAM Airlines Colombia offset the CO2 emissions of its 2015 land operations by acquiring 1,335 carbon bonds of the restoration project of degraded areas in Caceres, located in the northeast of Colombia in the Department of Antioquia. In total, the company has offset 3,346 tons of carbon dioxide emissions that correspond to their land emissions from 2013 to 2015.